Saturday, December 26, 2009

How working on Wall Street made me an Anarchist

Today, the lucid wonder that is Interfluidity linked to a Milton Friedman essay, which I found interesting.

... there is one and only one social responsibility of business -- to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.

Milton, if I may call him that, is always a joy to read because he is a sort of reductio ad absurdum of the libertarian position that once held me in its near total sway.  The essay succinctly summarizes the basic insight that third party managers (eg. corporate executives employed by a businesses owners) who declaim the "social responsibility of business" are really just spending other people's money, and without even the semblance of pseudo-democracy that serves as the prelude to this same expropriation by our government. 

I still like this perspective, and I think it has something to offer anyone willing to take it on for a moment, even though, as I say, I have moved away from it.  The reason for my change of stance in not, however, because I've gone all soft and bleeding heart.  On the contrary, I feel like I've departed from Milton only by taking the best part of his philosophy -- the reliance on freedom as a principle that can unify your view of politics -- to its logical conclusion.  This turns out to look a lot different than his stopping point, and suddenly lets his ideas communicate with anarchists like Chomsky, and even, strictly for illustrative purposes you understand, allows you to conceive of what it would mean to be a "free-market Marxist".  But for all that it has evolved, I still trace my thinking back to the moment when I saw how the question of freedom cuts right through the political spectrum and for the first time organizes your views into something that can properly be called a political philosophy.  Of course, it was actually Nozick, not Milt, that first made me see this, but whatever.  In either case, politics is transformed from a scattering of unrelated opinions/superstitions pertaining to various issues, into the application of a single principle under varied conditions -- how can we free ourselves?

What has changed since then?  Basically, I've just felt the need to expand the definition of freedom; passing from rebellious youth to creaking maturity has made me aware that being able to do what you want goes beyond simply not being told what to do.  From freedom from to freedom to.  I'll certainly not disagree with anyone who considers this extension obvious, but that doesn't make it any less profound.  It is not simply a matter of adding more freedom, as if freedom from were a proper subset of freedom to; while there is always a danger that utopian ideology wields the hammer of oppression, it's also evident that our age suffers from an overly narrow version of freedom from that can end up cutting us off from our ability to do more things, and in fact can even come back to erode the very walls we use to hold at bay all those things we are free from.

All of which brings us to the razor-sharp quote with which we began.  People should be free from the exploitation that occurs when someone else spends their resources without their consent.  Hence business as such has no social responsibility and should be uniquely concerned with profit.  So long as they stay within the rules and compete without deception or fraud, these joint ventures, as it were, are nothing but the voluntary and temporary pooling of individual resources, and it is as morally unconscionable for them to arbitrarily confiscate the resources of individuals by failing to maximize profits, as it would be for any of these individual members to expropriate the goods of another.  Freedom from coercion.

The political principle that underlies the market mechanism is unanimity. In an ideal free market resting on private property, no individual can coerce any other, all cooperation is voluntary, all parties to such cooperation benefit or they need not participate. There are not values, no "social" responsibilities in any sense other than the shared values and responsibilities of individuals. Society is a collection of individuals and of the various groups they voluntarily form.

Loyal readers will be absolutely groaning with the obviousness of where I'm going with all this, so I'll drop the coy shit now.

Who writes the rules that the businesses play within?  We admit the necessity of having rules.  The rules have to be uniform and standardized for the competition to be free and open.  Somebody has to write the rules. Somebody has to define the game we're playing.  So, how do the rules get written?  With just that one question, the entire libertarian apparatus unravels.  Because it's evident that businesses seeking to maximize their profit will find themselves morally obligated to extend their competition in an effort to write the rules in their favor.  And this feedback loop is entirely within the rules of the game, involves free and open competition in a political market and no more than customary quantities of deception and fraud.  In other words this problem is an inevitable and predictable outcome of a libertarian philosophy, and not a question of particular petty corruption  and dishonesty.  Eventually, strictly profit seeking enterprise will always seek it by capturing the government.  The logical conclusion of this freedom from coercion is its own self-destruction. 

The self-destruction of the libertarian position does not mean we should give up on the principle of freedom.  On the contrary, broadening this principle to include the concept of positive freedom and to safeguard our ability to engage in these games of voluntary cooperation to begin with can serve to reinforce the basic libertarian conclusion that the best way to stay free is to keep the government small.  It's true that you could argue in the opposite direction.  Consider the way people have painted the alternatives since our latest financial crisis -- government vs. business, profit and innovation vs stability and control.  The thinking is that big government will put a leash on the profit aspirations of big business by adding more rules to the game and insisting that all that panting and straining drag us in the right direction. 

But this doesn't turn out to be a very coherent response if you agree with my diagnosis of the problem.  How can adding more rules make this system more stable?  The instability arises from precisely the way the players are able to write new rules.  How can compounding this effect ultimately lead to a better outcome?  Even if, today, in a fit of reformist zeal, you manage to add rules that restrain business and channel its energies in the desired direction, you will still have tomorrow and the next day to worry about.  In fact, you can't even be sure that the new rules you write now are not precisely those that certain businesses wanted written to begin with.  Making the problem bigger in order to solve it might work, but does it seem like the most sensible direction to pursue?  Why give this feedback loop more material to consume?  Why imagine that it will somehow stop itself?

Nevertheless, I think most people instinctively go in the direction of bigger government and more rules because it is something they understand.  Control.  Domination of the future.  Planning and centralization and subsequent re-delegation to those trusted organs charged with maintaining the forward momentum that the great technocratic brain has calculated for our social organism.  Everybody is pretty comfortable with the wizard, and nobody really wants to know exactly what's behind the curtain.

And anyhow, the other direction is marked hic sunt draconesLess government?  More freedom?  How are we going to solve our problems?  How are we going to get what we want?  How are we even going to know what will happen?  Do you know who's in charge here?  It's just Anarchy.  The mind recoils.

So I became an anarchist.  And I've been becoming one ever since.

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